By Casey Hall
SHANGHAI (Reuters) – AliExpress, an e-commerce site owned by Chinese giant Alibaba, has signed former England soccer captain David Beckham as a brand ambassador as it plays catch-up with rival PDD Holdings’ Temu in a battle to sell cheap made-in-China goods to the world.
A low-key cross-border player until recently, Alibaba is now investing aggressively to boost global sales as domestic e-commerce growth wanes. Its international division, which includes AliExpress, is its fastest growing unit with revenues surging 45% year on year over January to March.
Earlier this year, AliExpress also signed on as a sponsor of the UEFA Euro 2024 tournament, which starts in June, where it will invest millions of dollars in discounts, deals and engagement to attract online consumers.
An advertisement campaign featuring Beckham will run in conjunction with the UEFA tournament and encourage consumers to “score more with AliExpress”, the e-commerce platform said in a statement on Monday.
This comes after the success of a move by PDD Holdings’ Temu to air multiple commercials at the Super Bowl this year encouraging U.S. consumers to “shop like a billionaire”.
According to mobile intelligence firm Apptopia, Temu’s app downloads jumped 34% on Super Bowl Sunday from the day before.
“Football, soccer, fans (in Europe and) Latin America are a similar demographic to American football fans in North America, they are generally going to include a lot of price-sensitive, inflation-impacted consumers,” said Humphrey Ho, U.S. managing partner at digital advertising agency Hylink Digital, about the decision by Temu and now AliExpress to focus on football fans.
COMPETITIVE LANDSCAPE
Though Alibaba has long looked at the overseas market as a potential money maker, with founder Jack Ma saying in 2017 that Alibaba aimed to serve 2 billion global consumers by 2036, it is having to make up ground in many markets ceded to rival Temu.
“Historically, execution has been the problem for Alibaba’s international ambitions,” said Jianggan Li, founder and CEO of Momentum Works, a venture and insights firm.
“Alibaba spent years debating whether it would be too difficult or too challenging to compete with Amazon (in the U.S.), and Temu just went ahead and did it.”
Temu, which sells $5 earbuds and $10 dresses among other things to over 60 global markets, has grown in popularity since its 2022 launch, with Chinese investment management firm CICC estimating Temu raked in $18 billion in revenue in 2023.
PDD does not break out revenue for Temu separately and does not comment on the accuracy of third-party sales estimates.
To better compete with rivals, Alibaba is now utilizing its competitive advantages, offering five-day delivery windows to 11 markets on a selection of products, backed by its investments in global logistics.
The buyback of logistics arm Cainiao in March will likely strengthen the logistical advantages AliExpress has over rivals.
AliExpress has a presence in more than 100 markets.
Alibaba has the will and the money to pump into growth for AliExpress, but most importantly, the competitive landscape is forcing the issue, changing the dynamics of cross-border e-commerce from China, Li said.
“AliExpress has to find a way to compete with and differentiate from Temu” in order to win market share, Li said.
“I mean, there’s no other choice.”
($1 = 0.9218 euros)
(Reporting by Casey Hall; Editing by Himani Sarkar)
Comments